2011-19661. Emergency Restoration Plan (ERP)

AGENCY:

Rural Utilities Service, USDA.

ACTION:

Final rule.

SUMMARY:

The Rural Utilities Service (RUS) is amending the requirements established for Emergency Restoration Plans (ERPs), currently mandated for all borrowers, to include a plan to comply with the eligibility requirements to qualify for the Federal Emergency Management Agency (FEMA) Public Assistance Grant Program in the event of a declared disaster. This amendment will ensure that RUS borrowers have a plan to maintain their eligibility to receive financial assistance from FEMA in the event they incur eligible costs for disaster related system repair and restoration.

DATES:

September 6, 2011.

FOR FURTHER INFORMATION CONTACT:

Donald Junta, USDA—Rural Utilities Service, 1400 Independence Avenue, SW., Stop 1569, Washington, DC 20250-1569, telephone [phone] or e-mail to [e-mail].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be not significant for purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

Executive Order 12988

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. The Agency has determined that this final rule meets the applicable standards in § 3 of the Executive Order.

Regulatory Flexibility Act Certification

It has been determined that the Regulatory Flexibility Act is not applicable to this rule since the Rural Utilities Service is not required by 5 U.S.C. 551 et seq. or any other provision of law to publish a notice of proposed rulemaking with respect to the subject matter of this rule.

Information Collection and Recordkeeping Requirements

The information collection burden associated with this rulemaking is approved under OMB control number 0572-0140. This rule contains no additional information collection or recordkeeping requirements under OMB control number 0572-0140 that would require approval under the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35).

E-Government Act Compliance

The Rural Utilities Service is committed to the E-Government Act, which requires government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible.

National Environmental Policy Act Certification

The Agency has determined that this rule will not significantly affect the quality of the human environment as defined by the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). Therefore, this action does not require an environmental impact statement or assessment.

Catalog of Federal Domestic Assistance

The program described by this rule is listed in the Catalog of Federal Domestic Assistance Programs under number 10.850, Rural Electrification Loans and Loan Guarantees. This catalog is available on a subscription basis from the Superintendent of Documents, the United States Government Printing Office, Washington, DC 20402-9325, telephone number [phone] and at https://www.cfda.gov.

Executive Order 12372

This rule is excluded from the scope of Executive Order 12372, Intergovernmental Consultation, which may otherwise require consultation with State and local officials, pursuant to USDA's regulation at 7 CFR part 3015.

Unfunded Mandates

This rule contains no Federal mandates (under the regulatory provisions of Title II of the Unfunded Mandates Reform Act of 1995) for State, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of §§ 202 and 205 of the Unfunded Mandates Reform Act of 1995.

Executive Order 13132, Federalism

The policies contained in this final rule do not have any substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, nor does this final rule impose substantial direct compliance costs on State and local governments. Therefore, consultation with States is not required.

Background

The Agency published a final rule on October 12, 2004, at 69 FR 60541 requiring all borrowers to maintain an Emergency Response Plan (ERP) that details how the borrower will restore its system in the event of a system-wide outage resulting from a major natural or manmade disaster or other causes. This ERP requirement was not entirely new to the borrowers, as RUS had recommended similar “plans” in the past. However, the need for an ERP requirement at that time was catalyzed by increased sensitivities relating to homeland security.

The purpose of the FEMA Public Assistance Grant Program is to provide assistance to State, Tribal, and local governments, and certain types of private non-profit organizations so that communities can quickly respond to and recover from major disasters or emergencies declared by the President.

Recent FEMA audits conducted on applications submitted by RUS borrowers have shown that borrowers have not always followed the policies and procedures set forth by FEMA for disaster related repairs and restoration. FEMA recently created a draft document titled “FEMA Disaster Assistance Fact Sheet 9580.6 (Electric Utility Repair (Public and Private Nonprofit)). This document contains sections on contracting, category of work, conductor replacement, hazard mitigation, and repair of collateral damage that outline FEMA requirements in these areas. It is financially advantageous for borrowers to qualify and receive disaster assistance funds for eligible work from FEMA in the event of a declared disaster or emergency. When RUS borrowers do not meet FEMA Public Assistance Grant eligibility requirements, they will be ineligible to receive disaster assistance funds.

Accordingly, the Agency published a proposed rule on January 26, 2010, at 75 FR 4006 proposing to amend the ERP regulatory requirements to add that the ERP reflect compliance with all requirements imposed by FEMA for reimbursement of the cost of repairs and restoration of the borrower's electric system incurred as the result of a declared disaster.

Discussion of Comments and Changes

RUS received one submission electronically on this proposed rule by the March 29, 2010, comment deadline. The submission was received from the National Rural Electric Cooperative Association (NRECA). The submission is summarized below with the Agency's responses as follows:

Issue 1: Commentor proposed modifying the rule as proposed to add a cost/benefit consideration.

Response: The Agency accepts the observation that there are costs to compliance. Money and time spent, delay in service restoration, and the possibility of consumer dissatisfaction in an extended outage are relevant in power restoration decisions and sometimes any additional costs of complying with FEMA's eligibility rules may outweigh the benefits of federal financial assistance for reimbursement and support a decision by a borrower to elect to pursue an alternative to competitively bidding a restoration job as generally required by FEMA. The final rule as published permits the borrower to make such a determination. The rule only requires the borrower develop a plan to comply with the FEMA requirements and be eligible to apply for FEMA assistance.

Issue 2: Commentor proposed a clarifying change that identifies the borrower, rather than the ERP, as the subject that “must comply with” FEMA reimbursement rules.

Response: Agency concurs. This clarification is intended to avoid an interpretation that would require the ERP to contain a mini manual of how to comply with the FEMA rules.

List of Subjects in 7 CFR 1730

• Electric power; Loan program—energy; Reporting and recordkeeping requirements; Rural areas

For reasons discussed in the preamble, the Agency amends 7 CFR, Chapter XVII, part 1730 as follows:

PART 1730—ELECTRIC SYSTEM OPERATIONS AND MAINTENANCE

1. The authority citation for part 1730 continues to read as follows:

Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

2. Amend § 1730.28 as follows:

a. Remove the word “and” from the end of paragraph (e)(4);

b. Redesignating paragraph (e)(5) as (e)(6); and

c. Add paragraph (e)(5) to read as follows:

§ 1730.28

Emergency Restoration Plan (ERP).

* * * * *

(e) * * *

* * * * *

(5) A section describing a plan to comply with the eligibility requirements to qualify for the FEMA Public Assistance Grant Program; and

* * * * *

Dated: July 22, 2011 .

Jonathan Adelstein,

Administrator, Rural Utilities Service.